Datadog stock surged Tuesday after the security software provider surpassed quarterly profit expectations and offered a solid outlook driven by more customers transitioning to the cloud.
The company earned 45 cents a share in the third quarter. Analysts surveyed by FactSet expected
Datadog
(ticker: DDOG) to report 34 cents a share. Revenue of $547.5 million was higher than the $524.7 million predicted.
The provider of IT monitoring software had 3,130 customers with annual recurring revenue of $100,000 or more by the end of the quarter, up 20% from the year-ago quarter.
The stock skyrocketed 30% to $103 on Tuesday.
For the fourth quarter,
Datadog
expects revenue of between $564 million and $568 million, beating analysts’ estimates of $544.9 million.
“Companies across all industries and sizes are building cloud applications and services to deliver positive business outcomes, including more users, higher revenue growth, improved productivity, and cost savings,” said CEO Olivier Pomel.
Pomel’s positive remarks follow his cautious stance on customer spending in August when he mentioned that “particularly some larger spending customers” were closely examining their expenses.
Shares of other software companies rallied after Datadog’s upbeat commentary: Cloud computing company
Snowflake
(SNOW) gained 7.3%, database management program
MongoDB
(MDB) was up 6.3%, and search engine analytics provider
Elastic
(ESTC) was up 4.9%.
Write to Karishma Vanjani at [email protected]
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